FTSE 100 plumbing parts supplier Ferguson expected to report profits surge

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Demand from US plumbers has been "healthy", say analysts (Source: Getty)

Plumbing and heating parts supplier Ferguson is expected to report increased revenues and profits when it announces full-year results on Tuesday.

The firm, known as Wolseley until it changed its name in March to that of its dominant US business, is expected to tell investors it raked in £17.2bn in worldwide revenues last year, with trading profits of £1.1bn, according to analyst consensus forecasts.

That would represent a £2.8bn increase in revenues compared to full-year 2016 results, and a near 20 per cent year-on-year increase in trading profit. Ferguson has already reported a rise of five per cent in trading profit for the six months ending in January.

Read more: Wolseley posts final figures before flushing away historic name

The results will be the first after a reshuffle at the dominant US operation: former US chief operating officer Kevin Murphy replaced former US chief executive Frank Roach in March, when the latter retired after 40 years with Ferguson. Murphy reports to group chief executive John Martin.

Analysts at Citigroup last week upgraded their recommendation on Ferguson on the back of a “healthy” market conditions in the US, which generates around 80 per cent of its trading profit.

Some analysts expect the plumbing distributor to face increased competition from Amazon, which started a move from its core consumer space into the lucrative business supply market in which Ferguson specialises.

However, analysts at Barclays expect Ferguson to be able to fend off the advance of the online giant, with a high “value-add service component” in the customer interaction which is difficult to replicate online.

Investors will also await news of the wind-down of the firm’s Nordic division, after Ferguson in March announced it is quitting Scandinavia following a strategic review.

Read more: Wolseley shares restrained despite gushing first quarter

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